Jerome Is a Farmer Who Has Just Agreed to Borrow

question 18

Multiple Choice

Jerome is a farmer who has just agreed to borrow $100 000 from the Bank of Montreal to buy some new farm equipment.He has given the bank a security interest under s 427 of the Bank Act.Which of the following statements is FALSE?

• A)The Bank Act limits the assets in which a security interest may be taken.In a security agreement, there is no restriction on the assets in which a bank may take a security interest.
• B)Security interests under the Bank Act are registered under a separate system set up under the Bank Act.Security interests under security agreements are registered under provincial personal property security legislation.
• C)A single registration of a security interest under the Bank Act is effective across Canada.Registrations under a province's personal property security laws are effective only in that province.
• D)Only banks can take interests under the Bank Act.Anyone can take a security interest created in a security agreement.
• E)Bank Act security clearly and always has priority over all prior registered provincial security interests.

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Definitions:

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